BHBFC lowers interest rates on flat, house loans

The government has reduced the interest rates on both house and flat loans of Bangladesh House Building Finance Corporation (BHBFC).
The Finance Ministry has already ordered the corporation to bring down the interest rates to nine percent, the Finance Ministry sources told the Daily Observer on Wednesday.
Debasish Chakrabarty, Managing Director of the BHBFC told the Daily Observer, BHBFC decided to reduce the interest rates on house and flat loans from July 1 this year with some conditions.
Earlier, the interest rates on house and flat loans were fixed at 10 per cent.  "We are working to adjust the interest rates with other banks and leasing companies."  
He said the board of directors of BHBFC sent a proposal to the Bank and Financial Institutions Division to cut interest rate and the Ministry had approved it.
Debasish said the Islamic Development Bank (IDB) began to release Tk 1,000 crore soft loans for BHBFC to extend the housing credit programme across the country, particularly in rural areas.     According to sources the BHBFC is now offering 9.5 per cent interest rate for Dhaka and Chattogram metropolitan areas while 10 per cent for other areas.
In April this year, BHBFC increased loan ceiling to Tk 80 lakh from Tk 40 lakh for flat purchase and reduced the interest rate to 10 per cent from 12 per cent for borrowers in Dhaka and Chittagong metropolitan areas.  
According to the sources, the BHBFC has taken a plan to disburse credit among farmers under the "Krishak Abashan Reen" programme for constructing their houses with a specific model called 'Koto System'.
Sources said, BHBFC disbursed Tk 360.02 crore in the fiscal year 2017-18 while Tk 278.51 crore in the fiscal year 2016-17 and Tk 247.98 crore in the fiscal 2015-16.
Meanwhile, owners of private commercial banks last June decided to bring down the interest rate on lending to 9 per cent and on deposits to 6 per cent from the existing levels. The new interest rates will come into effect from July, the first day of the fiscal year 2018-19.
The BAB took the decision under the direction of Prime Minister Sheikh Hasina to create an industry-friendly environment, create new entrepreneurs, and generate employment and to accelerate trade.
Meanwhile, the government has decided to implement 5 per cent interest rate on home loan for public servant from November.
For this reason, the government employees can apply for a home loan from next October, the Finance Ministry Sources told the Daily Observer.
The working committee for the housing construction small loan has prepared a common application form for all officials.